New Bill seeks to weed out rogues in growing digital currency sector

National Assembly Finance Committee chairperson Kuria Kimani says licensing requirement to position Kenya as a leader in digital finance on the African continent. [File, Standard] A Bill that seeks to establish a comprehensive regulatory framework for the booming virtual asset sector is currently before the National Assembly. The Virtual Asset Service Providers Bill (National Assembly Bill No.15 of 2025) sponsored by Molo MP Kuria Kimani seeks to position Kenya as a leader in digital finance on the African continent. Kimani highlighted Kenya's impressive engagement with digital assets ranking third in Africa on-chain weighted transactions. According to the MP, in the last one year, Kenya has traded in at least Sh258 billion in decentralised protocols, liquidity aggression and synthetic platforms. "We have approximately 6.1 million Virtual Assets Services users with the country having the potential in this space to generate at least Sh130 billion in terms of foreign direct investment, the passage of this Bill having the potential to create, at least, 25,000 jobs in Kenya in the next one year," said Kimani. The National Assembly Finance Committee chairperson suggested that block chain technology could be used to address the country's substantial pending bills with the Controller of Budget estimating them to be around Sh550 billion, which can be tokenized. Kimani told Parliament he had a conversation with a former Central Bank of Kenya Governor who dismissed virtual assets as a passing cloud, but it is now evident digital asset technologies including bitcoin, blockchain, Ethereum and stablecoins are there to stay. National Assembly Majority Leader Kimani Ichung'wah, who seconded the Bill, drew parallels between the current virtual asset revolution and Kenya's pioneering role in mobile money. Ichung'wah, however, cautioned against the risks inherent in an unregulated environment, citing concerns like cyber security risks, data privacy risks and fraud. "Many of those people, including some who are in our space, are involved in what has been christened wash wash. These people are now graduating from their wash wash business into the virtual assets industry and scamming very many Kenyans in the process," said Ichung'wah. According to the Bill, any individual or entity engaging in virtual asset services in Kenya will be required to obtain a license from a designated regulatory authority, which could include Capital Markets Authority, Central Bank of Kenya or the proposed Virtual Assets Regulatory Authority. Kimani underscored importance of the licensing requirement by referencing past unregulated failures citing the 2023 case in which thousands of Kenyans lost millions of shillings after cryptocurrency platform Bit Stream Circle collapsed. The Bill seeks to prevent such risks by mandating that virtual asset service providers to establish and maintain effective internal policies to identify, mitigate and manage potential or actual conflicts of interest. To address these concerns, the Bill mandates Virtual Assets Service Providers to maintain adequate safeguards for client assets and obtain appropriate insurance cover. It further stipulates that providers must maintain a bank account in Kenya to enable effective monitoring and oversight. "It was not clear how to get your money back from a virtual asset trader if you need to that is why we are emphasizing the consumer protection aspect," said Ichung'wah. The Bill grants regulatory authorities powers to vet shareholders and senior officers of virtual assets service providers with on-site and off-site inspections and enforce anti-money laundering and financing of terrorism laws. Samburu West MP Naisula Lesuuda pointed out the need to protect young people who are increasingly drawn to virtual assets. Lesuuda supported the Bill's requirement for a registered office for virtual asset service providers within Kenya to ensure accountability, arguing that in case of fraud, it will be possible for regulatory bodies to track down the culprits. "We should note the license and compliance costs are high. Small start-ups may struggle with the financial and bureaucratic burdens, leading to monopolisation by large firms," she added.

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